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The future of cities

The future of cities
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ARTICLE TYPE
Sustainability Soapbox
TOPIC
Responsible Investing
PUBLISHED
February 25,2022
READ TIME
3 mins
AUTHOR
Malcolm McPartlin
SHARE
Back
ARTICLE TYPE Sustainability Soapbox
TOPIC Responsible Investing
PUBLISHED February 25,2022
READ TIME 3 mins read
AUTHOR Malcolm McPartlin
SHARE

According to the UN, half of humanity (3.5 billion people) live in a city today. This number is projected to increase to 5 billion by 2030 and to almost 6.5 billion by 2050.

In the developed world, urbanisation rates are typically much higher; in OECD countries over 80% of populations live in urban areas. The vast majority of future growth in city populations is expected to come from developing countries such India or across the African content where urbanisation rates are less than half of the OECD level. 

 

From a sustainable perspective, cities offer both significant challenges and opportunities.  The UN estimates that although cities only occupy 3% of the Earth’s land, they account for around 60-80% of energy consumption and 75% of carbon emissions. Cities require a huge amount of natural resource to build and maintain them. Social issues are significant with typically wide and growing social divides within cities. And these issues become even more exaggerated when cities see rapid population growth and their infrastructure struggles to keep up. Issues such as climate change, flooding, pollution, access to water, sanitation, electricity and affordable housing are most acutely observed in many of world’s major metropolitan areas. However, we should also expect the solutions to many of the world’s sustainable challenges to come from these conurbations. Cities have always been at the forefront of innovation, creativity and leading societal change. Forward thinking policies such as smoking bans or congestion charges have been led by major cities and followed by others.

 

What should we expect from cities of the future?

There are a number of considerations that will determine how cities develop in the future. In the near-term the focus for the developed world is how our cities will change in the aftermath of the Covid-19 pandemic. We should expect a period of heightened change; given the sudden shift from office-based workers to a hybrid model and the accelerated trend of retail spend moving online many city centres will need to reinvent themselves over the coming years. In the developing world cities will continue to absorb high rates of urbanisation and will have to ensure the level of infrastructure can keep up, while also trying to deal with the acute social issues rapid urbanisation can cause.

 

Looking further out to the future we expect to see sustainable considerations embedded into every aspect of how cities are designed and managed. From energy use to waste, transport and social issues cities will be increasingly optimised with sustainability in mind.

The 15-minute city

A key concept for cities of the future is the idea of the 15 minute city - everything you need for daily living will be within a 15 minute walk or cycle. Cities of the future – which includes adapting existing cities as well as creating new ones - are likely to be built around several decentralised hubs containing the majority of services (amenities, education, healthcare, recreation, etc) residents require. This contrasts to the historic model of a focal point around the traditional city centre.

 

Smart cities

The concept of smart cities is already emerging with the development of sensor technologies, 5G and the internet of things. In smart cities technology, data and connectivity are used across many interlinked city services to help develop, deploy and promote sustainable practices to address urbanisation challenges. Technologies can be used to optimise many aspects of city living such as infrastructure, transport, public services and utilities. Smart city technology is already deployed in many ways around the world and we expect to see adoption rates rapidly increase. For example, in a smart city technology could be used to control traffic lights and guide traffic flow to ease congestion, and cars could communicate with infrastructure to find charging points. Waste disposal skips could contain sensors so pick-ups are scheduled when needed and not at pre-planned times, while intelligent irrigation could be used in public spaces to turn off water use when water levels are low or conditions are poor.  We already see smart city concepts widely used to keep cities safe with technologies such as CCTV and even artificial intelligence used in crime prevention.

 

As we look to the future, the ongoing evolution of technology and intelligence should see cities drive forward the sustainable agenda. There are a number of early-stage technologies in existence today with exciting and potentially transformational applications, which will most likely be adopted first in the big cities. For example, we may see metropolitan skyscrapers covered in photovoltaic glass, turning them in to towering solar panels. Or smart greenhouses where the food requirements of a city are produced in close proximity rather than transported around the world. Urban gardens and farms could employ advanced hydroponic technology using a combination of renewable energy and a sustainable water source such as intelligently captured rainwater to grow fresh food for the local urban population.

 

 

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More about the authors

Malcolm McPartlin Investment Manager

Malcolm McPartlin is an investment manager in our equities team, where he co-manages the award-winning Aegon Global Sustainable Equity strategy and the Aegon International (ex-US) Sustainable Equity strategy.

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